Monero (also called XMR) is a form of digital currency that allows fast, inexpensive payments to and from anyone from anywhere in the world. Like any other mediums of exchange, Monero can be used to purchase goods and services, to make payments, and to be traded with other forms of assets such as other digital currencies or conventional fiat money.
Before being able to use XMR, one must own an XMR wallet or account. An XMR wallet stores all the coins necessary to make transactions. An XMR wallet also keeps a private record of a user’s transactions. Lastly, an XMR wallet includes an address book, together with a mining software which is necessary to be able to mine Monero.
Over the past few years, Monero has quickly been gaining the interest of investors and cryptocurrency enthusiasts. Here are a few reasons why.
Monero Will Protect Your Anonymity
Many cryptocurrencies are quasi-anonymous, which means that you can hold a cryptocurrency address, or multiple addresses for that matter, without anyone knowing your identity. Sounds good, right? The catch is, every time you make a transaction, the details of that transaction are recorded in the blockchain and become publicly accessible and visible. With a bit of sleuthing, other people might be able to track your transaction history and check your balance. Your identity could be disclosed, together with the identity of those you have previously transacted with, unless you use a different address every time.
Monero’s privacy technology is nothing like the one described above. Monero uses “ring signatures,” a cryptographic tool with a very strong cryptographic security that makes transaction details untraceable by default by using past transaction outputs to serve as “decoys.” No one has the capacity to know which among the decoys actually made the transaction, which affords anonymity to both the sender and the receiver.
Monero Offers True Accessibility
Many cryptocurrencies, like Bitcoin, use application-specific integrated circuits or ASICs, a custom-made chip designed for mining a specific digital currency. These cryptocurrencies can only be mined using computers that have ASICs installed, which means that users who only own standard laptops or computers will not be able to participate in the mining process.
Monero, on the other hand, uses RandomX, an ASIC-resistant, proof of work mining algorithm. RandomX uses random code execution and high memory consumption to prevent specialized mining hardware like ASICs from taking over the network. RandomX can be run on standard CPUs found in most laptops and computers, making the network accessible to more people around the globe.
Monero Offers an Adaptive Block Size Limit
A block size limit refers to the number of transactions any given blockchain can hold in a given period of time. Monero’s block size limit is automatically adaptive, which means that Monero will be able to receive and process transactions as they enter by automatically expanding the blockchain’s block size. With Monero, transaction delays will not be a concern because a new block is created every 2 minutes.
Monero Has True Fungibility
Fungibility is one of the biggest advantages of Monero over other cryptocurrencies. Fungibility simply means that two units of currency are of equal value and can be mutually substituted. Monero’s inherent privacy ensures that all Monero transactions remain confidential, and there is no way to know what kind of transaction was made or who the people involved were. Therefore, 1 XMR will always be functionally identical to another 1 XMR no matter its past transactions, and this applies to all Monero coins in the network.
Monero Is Exchangeable
Monero developers have launched the Atomic Swap feature, a program that allows users to swap their Monero for Bitcoin without going through a third party. The Atomic Swap feature also protects Monero transactions from being detected in Bitcoin’s ledger, which means that even after exchanging Monero for Bitcoin, the transactions you made using your Monero coins will remain private. In addition, Monero’s exchangeable nature enables investors to swap their Monero for another cryptocurrency when they feel like they are going to face a loss. This Monero feature makes it attractive to most cryptocurrency investors.
Monero Has a Well-Established Community
Monero was released in 2014 and has since then been able to build a large community with volunteers who are willing to dedicate their time to improving the project. Cryptographers, researchers, and cryptocurrency enthusiasts from all over the world meet to find new ways to improve how Monero can be used. Volunteers in the community have also been generous enough to curate a vast amount of resources which Monero users can utilize to expand their knowledge about the cryptocurrency. Monero exists thanks to its community members who take part in improving the Monero experience.
Even with the inevitable risks of cryptocurrency investment, Monero’s security, privacy, and market value look very promising. With all the potential it holds, Monero may just be the next big thing in cryptocurrency